Basis

The basis is the futures-versus-spot spread:

basis   = F − S
basis % = (F / S − 1) × 100

If spot BTC is $64,000 and the June future trades at $65,280, the basis is $1,280, or 2%.

Where it comes from

In traditional markets the fair basis reflects carry costs like interest and storage. In crypto it's dominated by demand for leverage. Bulls who want levered upside bid up futures, pushing the basis positive (contango) in optimistic regimes, often to double-digit annualized premiums in euphoria. In panic it occasionally goes negative (backwardation).

The one certainty: convergence

Whatever the basis is today, it is zero at expiry, because the future settles at spot. The path isn't smooth; the basis wobbles with sentiment the whole way. But its destination is contractual. That deterministic decay is what cash-and-carry trades harvest, and comparing opportunities across expiries requires putting bases on a common footing, which is what the net annualized basis does.

On AlphaProve

The instrument universe here is perpetuals, which never settle, so no dated F − S basis converges toward an expiry for a strategy to trade on AlphaProve. The perp counterpart of basis is the premium that funding continuously arbitrages away, and that funding stream — not the dated spread above — is what the engine prices into a held position through its cost model. Treat this term as background for reading the market; the modeled, tradable version on the platform is funding.